Press Release - Collecting the Television Licence Fee
15 May 2002
Sir John Bourn, Head of the National Audit Office reported today
that there has been a downward trend in TV Licence fee evasion. But
evasion is costing the BBC an estimated £141 million a year in lost
revenue, and more on some estimates. This is equivalent to an extra
£6 being available to the BBC for each licence payer.
The TV licence fee is used to fund public service broadcasting
and the BBC has been responsible for collecting the licence fee
since 1991. In 2000-01 over 23 million licences were issued, which
provided net income of £2,371 million and cost £132 million to
collect. Progress has been made in tackling evasion and encouraging
prompt payment. Nonetheless, based on the Department for Culture,
Media and Sport’s statistical modelling, which is currently being
revised, evasion is still running at between 5.2 per cent and 7.6
per cent, and on some estimates it is higher.
An important part of reducing evasion is making it easy to pay
the licence fee and the BBC has been successful at introducing a
range of payment methods. It has increased the number of people
paying by direct debit from 15 per cent to 49 per cent and is
aiming for further increases. However, some instalment schemes
require the licence fee payer to pay one and a half times the full
cost of a licence in the first year – an upfront cost which may be
acting as a barrier to joining these schemes.
The report shows that much is being done to deter and detect
evaders. It also shows that:
- Among the factors which informed a review that set the level of
the television licence fee were forecasts of increased licence
sales. These forecasts depended on assumptions about household
growth and reductions in evasion. Sales increased in 1999-2000 and
2000-01 but fell below those forecasts. Were the trend to have
continued, net revenue could have been £200 million lower than
expected over the period to March 2007.
- Enquiry officers, who conduct door-to-door visits, sold
licences worth £69 million in 2000-01 and caught 398,000 suspected
evaders. But 79 per cent of visits resulted in no customer contact
– the majority (57 per cent of visits) because the occupant was not
at home or did not answer the door. As an illustration, increasing
by ten per cent the proportion of visits that resulted in a sale
would result in additional revenue of at £5 million, allowing for
the costs involved.
- A key factor in getting the most out of enquiry officer visits
is accurate data. In 2000-01 enquiry officers made 646,000 visits
(20 per cent of all visits) to properties that were vacant or under
construction, 70,000 (2.1 per cent) to properties that did not
exist, and 79,000 (2.4 per cent) to properties that turned out to
be properly licensed. The BBC is working to improve the quality of
data, in part through using enquiry officers’ visits themselves to
improve data accuracy.
- Contrary to statutory obligations placed on retailers,
commercially available data suggests that up to 40 per cent of
equipment sales and rentals may not be notified to the BBC, at an
estimated cost to the BBC of up to £7.7 million in 2000-01.
- Significant numbers of offenders still do not buy a licence
after conviction. Enquiry officers made almost 47,000 ‘prosecution
follow up visits’ in 2000-01 and took a second prosecution
statement in almost one in three cases.
Sir John Bourn said today:
"Television licence fee evasion affects all licence
payers. Even on conservative estimates the cost of evasion
represents approximately £141 million a year, or £6 for each
licence payer, that would otherwise be available to the BBC. The
BBC has already done much good work to reduce the evasion rate and
continues to take steps to strengthen the collection and
enforcement arrangements. My report highlights opportunities to
make further progress".
Notes for Editors
- The BBC has been responsible for issuing licences, collecting
licence fees and enforcing the licensing system in 1991. In
practice the BBC has contracted out the work to an agent operating
as ‘TV Licensing’. Historically, the BBC has been heavily reliant
on Consignia (formerly the Post Office) for this work, which ranges
from issuing licence fee renewal notices to customers, to
collecting payments, and identifying and prosecuting evaders.
Capita Business Services Limited are taking over responsibility (as
TV Licensing agent) for collecting and enforcing licences with
effect from 1 July 2002.
- The National Audit Office are on the Internet. Press notices
are available from the date of publication. These can be accessed
through the NAO press notices home page at http://www.nao.org.uk/pn/archive.asp.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office employing some 750 staff. He and
the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 42/01
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